Algeria announces third oil licensing round

13 September 2010

Third bidding round announced as North African state looks to draw line under corruption scandal

Algeria’s National Agency for the Valorisation of Hydrocarbon Resources (Alnaft) has announced a third oil and gas licence bidding round in the North African state.

Alnaft is offering the rights to develop 10 areas in Algeria and has scheduled a meeting for interested parties on 30 September in Algiers to discuss main contractual provisions of the licences. Clarification meetings are due to take place between October and December with bid submissions and subsequent public opening of the bids taking place on 3 March.

The auction is the first major hydrocarbons development since Youcef Yousfi replaced Chakib Khelil as Algeria’s energy minister and the senior management of the state-owned oil company Sonatrach were removed due to corruption allegations (MEED 9:4:10).  

The previous bidding rounds held by Alnaft in 2008 and 2009 were not a success with international oil companies (IOCs) not bidding for many of the blocs (MEED 30:10:09). Algerian officials blamed the global economic downturn for the lack of interest, but many officials from the international oil companies blamed the harsh terms set by Sonatrach.  

Under Algeria’s revised 2006 Hydrocarbons Law, state energy firm Sonatrach takes a 51 per cent stake in all upstream developments and a tax is levied on every barrel of oil sold at more than $30. In the 2008 bid round, Alnaft also demanded that IOCs offer assets abroad as part of any deal. That was later discarded following complaints from IOCs.

The licences that are available are:

  • Oued-Mya region: Guern Cheikh
  • Illizi region: Isarene Ouest, Timissit Est, Bordj Omar Driss N
  • Sbaa region: Belrhazi
  • Berkine region: Rhourde Rouni II, Zemlet En Naga, Rhourde El Louh II, Rhourde Fares
  • Tell region: Hodna Ouest


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